Christie revives plan for tax cut

By MELISSA HAYES and JOHN REITMEYER

state house bureau |

The Record

Without saying how much it would cost or how the state will pay for it, Governor Christie is reviving a tax credit plan that would offer qualifying homeowners a $100 credit when they file their income taxes next year.

Christie’s proposal would also undue his earlier cut to a tax credit for the working poor, and it comes as the governor plans to postpone another property tax relief program until later this year.

Christie, who is seeking a second term this year, made his announcement on the last day 2012 income tax bills were due. But it’s not clear how much momentum there will be for the Republican governor’s tax credit in the Democratic-controlled Legislature. Democratic leaders accused Christie of an election year stunt and didn’t immediately support it.

“We’re all for cutting taxes, but we need to be responsible,” said Senate Budget and Appropriations Committee Chairman Paul Sarlo, D-Wood-Ridge.

Christie’s proposal, announced during a radio interview Monday morning, calls for a phased in income tax credit over four years that would end up equal to 10 percent of a homeowners’ property tax bill, but no larger than $1,000. Only property owners making up to $400,000 annually would be eligible for the new credit, which would begin at $100 when filers submit their income tax returns in 2014.

And Christie’s proposal offers lawmakers concerned about lagging state tax collections a way to block the tax relief.

“This now provides them with the opportunity to both institute a tax cut with my signature, but stop a tax cut without my signature,” Christie said on NJ 101.5 FM. Monday morning. “So this is now up to them.” he said.

If eventually implemented over four years, the maximum $1,000 credit would rival the $1,000 and larger Homestead rebate checks that were distributed in 2007. Billed as permanent relief at the time, Christie changed the Homestead program to a credit in 2010, with benefits now averaging $409 for homeowners making up to $75,000 and $518 for seniors and disabled homeowners making up to $150,000 annually.

This year’s credits were first scheduled to go out in February, but will now go out in August, meaning recipients will have to go a full 18 months before they see the benefit.

It’s unclear right now how far a $100 credit would go to help property owners who are facing New Jersey’s ever-rising property tax bills.

The average New Jersey property tax bill rose by $183 from 2010 to 2011, according to the state Department of Community Affairs. The department has yet to release the data for 2012.

It’s also unclear how much the credit would cost or how it will be paid for as it is phased in.

Christie spokesman Michael Drewniak did not provide an estimated cost for the credit Monday afternoon, and the governor’s proposed $32.9 billion spending plan for the fiscal year starting July 1 doesn’t include funding for it or the restoration of the Earned Income Tax Credit, which Christie reduced from 25 percent of the federal level to 20 percent of the federal level in 2010.

It will cost $66.6 million to restore the credit for the working poor back to 25 percent, according to a recent analysis from the non-partisan Office of Legislative Services.

Christie’s proposed budget, meanwhile, already includes $540 million worth of business tax cuts.

Though he announced it on the radio, Christie’s official proposal came Monday in the form of a conditional veto of a Democratic-sponsored bill to restore the credit for low income workers. He offered a similar restoration of the credit when he vetoed a minimum-wage increase in January.

Assembly Speaker Sheila Oliver, D-Essex — a longtime proponent of the Earned Income Tax Credit and sponsor of the bill that was conditionally vetoed — knocked Christie for not identifying how he’ll pay for the tax policy changes.

“Election year posturing to the citizens of our state is shameful,” she said.

Democratic gubernatorial hopeful Barbara Buono said approving a millionaire’s tax – which Christie has vetoed – would be one way to fund the program.

“After forcing property owners to forgo a tax cut for a year, it is outrageous that he is trying to shift blame to Democrats for his fiscal irresponsibility,” said Buono, a veteran state lawmaker from Middlesex County.

Christie’s tax policy proposal is actually a revival of a tax-relief initiative Senate President Stephen Sweeney, D-Gloucester, first called for last year.

Sweeney proposed a new credit for property owners making up to $250,000 as a counter-offer to the 10 percent across-the-board income tax cut – which would have given the largest tax cuts to people earning the most money – that Christie detailed in his State of the State address last January.

Sweeney and Christie were set to announce a compromise in a news conference last May – with the ceiling on the property tax credits raised to property owners making up to $400,000 ­— but Democrats refused to support the plan after state revenues came in far behind the governor’s lofty projections.

The revenue is still not there, Sweeney said Monday during a State House news conference.

“No one wants to do a tax cut plan more than I do, because the governor actually agreed to my tax cut plan,” he said.

Christie revives plan for tax cut

Without saying how much it would cost or how the state will pay for it, Governor Christie is reviving a tax credit plan that would offer qualifying homeowners a $100 credit when they file their income taxes next year.

Christie’s proposal would also undue his earlier cut to a tax credit for the working poor, and it comes as the governor plans to postpone another property tax relief program until later this year.

Christie, who is seeking a second term this year, made his announcement on the last day 2012 income tax bills were due. But it’s not clear how much momentum there will be for the Republican governor’s tax credit in the Democratic-controlled Legislature. Democratic leaders accused Christie of an election year stunt and didn’t immediately support it.

“We’re all for cutting taxes, but we need to be responsible,” said Senate Budget and Appropriations Committee Chairman Paul Sarlo, D-Wood-Ridge.

Christie’s proposal, announced during a radio interview Monday morning, calls for a phased in income tax credit over four years that would end up equal to 10 percent of a homeowners’ property tax bill, but no larger than $1,000. Only property owners making up to $400,000 annually would be eligible for the new credit, which would begin at $100 when filers submit their income tax returns in 2014.

And Christie’s proposal offers lawmakers concerned about lagging state tax collections a way to block the tax relief.

“This now provides them with the opportunity to both institute a tax cut with my signature, but stop a tax cut without my signature,” Christie said on NJ 101.5 FM. Monday morning. “So this is now up to them.” he said.

If eventually implemented over four years, the maximum $1,000 credit would rival the $1,000 and larger Homestead rebate checks that were distributed in 2007. Billed as permanent relief at the time, Christie changed the Homestead program to a credit in 2010, with benefits now averaging $409 for homeowners making up to $75,000 and $518 for seniors and disabled homeowners making up to $150,000 annually.

This year’s credits were first scheduled to go out in February, but will now go out in August, meaning recipients will have to go a full 18 months before they see the benefit.

It’s unclear right now how far a $100 credit would go to help property owners who are facing New Jersey’s ever-rising property tax bills.

The average New Jersey property tax bill rose by $183 from 2010 to 2011, according to the state Department of Community Affairs. The department has yet to release the data for 2012.

It’s also unclear how much the credit would cost or how it will be paid for as it is phased in.

Christie spokesman Michael Drewniak did not provide an estimated cost for the credit Monday afternoon, and the governor’s proposed $32.9 billion spending plan for the fiscal year starting July 1 doesn’t include funding for it or the restoration of the Earned Income Tax Credit, which Christie reduced from 25 percent of the federal level to 20 percent of the federal level in 2010.

It will cost $66.6 million to restore the credit for the working poor back to 25 percent, according to a recent analysis from the non-partisan Office of Legislative Services.

Christie’s proposed budget, meanwhile, already includes $540 million worth of business tax cuts.

Though he announced it on the radio, Christie’s official proposal came Monday in the form of a conditional veto of a Democratic-sponsored bill to restore the credit for low income workers. He offered a similar restoration of the credit when he vetoed a minimum-wage increase in January.

Assembly Speaker Sheila Oliver, D-Essex — a longtime proponent of the Earned Income Tax Credit and sponsor of the bill that was conditionally vetoed — knocked Christie for not identifying how he’ll pay for the tax policy changes.

“Election year posturing to the citizens of our state is shameful,” she said.

Democratic gubernatorial hopeful Barbara Buono said approving a millionaire’s tax – which Christie has vetoed – would be one way to fund the program.

“After forcing property owners to forgo a tax cut for a year, it is outrageous that he is trying to shift blame to Democrats for his fiscal irresponsibility,” said Buono, a veteran state lawmaker from Middlesex County.

Christie’s tax policy proposal is actually a revival of a tax-relief initiative Senate President Stephen Sweeney, D-Gloucester, first called for last year.

Sweeney proposed a new credit for property owners making up to $250,000 as a counter-offer to the 10 percent across-the-board income tax cut – which would have given the largest tax cuts to people earning the most money – that Christie detailed in his State of the State address last January.

Sweeney and Christie were set to announce a compromise in a news conference last May – with the ceiling on the property tax credits raised to property owners making up to $400,000 ­— but Democrats refused to support the plan after state revenues came in far behind the governor’s lofty projections.

The revenue is still not there, Sweeney said Monday during a State House news conference.

“No one wants to do a tax cut plan more than I do, because the governor actually agreed to my tax cut plan,” he said.